August 2015
DEAL OF THE MONTHBorrower Request in Georgia
Borrower signed a lease with a national bank and wanted to construct a new improvement for the bank on an existing pad site whose current improvements had been constructed for a chain restaurant that was no longer in business.
Property Type:
100, 000 sf
Class B office/retail property
Loan Size:
$20.25MM
Closing Month:
July 2015
Challenge
Borrower signed a lease with a national bank and wanted to construct a new improvement for the bank on an existing pad site whose current improvements had been constructed for a chain restaurant that was no longer in business. Lender needed to insure the demo of existing improvements and the construction of new improvements would not constitute a REMIC violation. Lender also needed to insure that they were properly protected for the risk associated with the construction of new improvements.
Solution
Lender ultimately agreed to the execution of the ground lease and construction of new improvements.
1st Service Solutions provided the information and discussion with Lender to help conclude that the proposed transaction would not constitute a REMIC violation. Additionally, 1st Service Solutions was able to successfully negotiate reserving only a portion of landlord’s cost of construction that was acceptable to both Borrower and Lender.